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Social and Behavioral Approaches to Global Problems


In the course of past century, humanity has confronted a multitude of seemingly intractable global problems. These include economic problems such as financial crises, employment insecurity and persistent pockets of poverty; social problems such as demographic challenges and social fragmentation; environmental problems such as climate change, biodiversity loss, freshwater scarcity; and political problems such as international crime, weapons proliferation, and corruption. We have the technical capacity to solve many of these problems, but we have nevertheless made little progress in addressing them.
Market failure is the explanation that mainstream economics offers for the persistence of many global problems. On this basis, economists commonly advocate policies that offer individuals full compensation for the benefits and costs they generate – through taxes and subsidies, redefinitions of property rights, and various laws and regulations. The Invisible Hand, along with the associated explanation for market failures, presupposes that people

(i) are individualistic, self-sufficient, self-interested, and materialistic (in the sense that their utilities depend primarily on goods and services),

(ii) have internally consistent, stable, far-sighted preferences,

(iii) are means-end rational, in the sense of using their available means to achieve their given, preference-determined ends, and

(iv) maximize their utility, which describes both their decision-making and their well-being.

The claim underlying this research area is that this conception of human motivation and decision-making is outdated and inconsistent with current evidence from other disciplines, such as neuroscience, cognitive science, cognitive psychology, developmental psychology, behavioral economics and more. For example, people are not exclusively self-interested, since they have capacities for fairness, empathy, compassion, and care; they are not exclusively rational, because most of their behavior is substantially motivated by emotions and heuristics; they are not exclusively individualistic, since their preferences are significantly determined by the social groups to which they belong; their decisions are not responses to propositional knowledge under conditions of risk, since their decision-making is a reflexive process (both cognitive and causative) made under uncertainty.
This research area analyzes the impact of social interaction and behavioral responses of the single agents on the emergence of global economic problems and the design of possible solutions in view of these results. Special attention is given to lack of global cooperation and excessive risk taking as two major sources of global problems. The research area takes the view that understanding human behavior in this context requires to know

(i) how the brain works and, more specifically, how motivational systems and bodily reactions shape our decisions, and

(ii) the impact of social interaction as people are usually not exclusively self-interested but also strive for fairness and equality. Therefore our analysis takes into account recent insights from related disciplines as neuroscience, psychology, cognitive science, and behavioral economics and explores their consequences for addressing global problems.


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